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2013 Model S Price Increase

We originally unveiled the Model S in March 2009 with a base price of $57,400 ($49,900 after federal tax credits). Today, Model S is the most award-winning car of the year and the base price remains at $57,400, the same price set over three and a half years ago. During this same period of time most automotive companies have had at least three price increases and general inflation (CPI) has gone up 8.75 percent. A straight 8.75 percent CPI increase would now yield a base price for Model S of $62,400, an increase of $5,000. We are increasing prices only half that amount, giving Model S a new base price of $59,900 before federal tax credits.

Increasing prices on an annual basis is standard practice in the automobile industry and almost every industry for that matter. The price increase we are announcing today will be for new reservations starting January 1, 2013. These reservations will begin deliveries several months later, which means the new prices will actually go into effect over four years after we originally set base pricing for Model S. We believe it is a positive reflection on our design process and disciplined, long-term planning that enables us to increase prices for the first time in four years at only half the rate of inflation.

This is our first price increase since the announcement of Model S and it is very important that we implement this in a way that recognizes those who already have a Model S reservation. This price increase will not apply to anyone who has or makes a reservation by end of day on December 31, 2012…as long as they finalize their order within a reasonable, predefined timeframe after being invited to configure their Model S.

If you don’t finalize your reservation within the timeframe, it will remain intact. However, when you configure your car and finalize your order at a future date it will be under the new pricing and options schedule. There will be no other changes to your reservation.

NEW PRICES, UPDATES AND ADDITIONS

Our approach has always been to keep things as straightforward as possible. With that in mind we are simply adding $2,500 to the base price of each Model S variant.

Below is a chart showing the changes:

After the price change, all vehicles will include 12-way adjustable, heated front seats as standard equipment at no charge.

Going forward the Performance Package will include 19” wheels and tires as standard equipment. 21” wheels and tires will be a $3,500 option.

The new 2013 Red multi-coat exterior paint will now be available to order. It is priced the same as Pearl White multi-coat -- $1,500. Production of the new 2013 Red multi-coat will begin in March of 2013.

Model S comes standard with a Four Year, 50,000 mile New Vehicle Warranty. An additional Four Year, 50,000 mile Extended Warranty will now be available for $2,500. Please note, this is a “Four Year” Extended Warranty, not two or three years like most Extended Warranties. You will be able to purchase this option through your MyTesla page in the near future.

Several months ago we announced a Four Year, up to 50,000 Mile Prepaid Maintenance program for $1,900, or $2,400 with unlimited Tesla Ranger visits. You will now be able to purchase an additional Four Years and 50,000 miles of Prepaid Maintenance for an additional $1,900, or $2,400 with unlimited Tesla Ranger visits. With this additional program you can now cover everything on your Model S, except tires, for eight years and up to 100,000 miles for $3,800, or $4,800 with unlimited Tesla Ranger visits.

We have received many requests for a Battery Replacement Option. We are happy to now offer this option for all three battery variants. This option will provide you a new battery anytime after the end of the eighth year at a fixed price. Prices are as follows: $8,000 for the 40 kWh battery, $10,000 for the 60 kWh battery, and $12,000 for the 85 kWh battery. You will be able to purchase this additional option through your MyTesla page in the near future.

INTERNATIONAL IMPLEMENTATION

In Canada, the base price for Model S will go up $2,600CAD, and all implementation steps will be followed as in the U.S.

We plan to announce European pricing very soon, which will include this recent price increase. We have many reservation holders around the world who have faithfully supported us throughout the years and we want to make sure they are recognized for their support. Therefore, we will automatically deduct €1,700 (or the local equivalent in other countries) from the base price for everyone who has or makes a reservation by end of day on December 31, 2012…as long as they finalize their order within a reasonable, predefined timeframe after being invited to configure their Model S.

WRAP UP

Our customers are among our most important assets and we will always strive to deliver to them the most innovative cars in the world while minimizing price increases as we have done today.